Globalization and Redistribution: The Missing Link

Lloyd Gruber

No 508, Working Papers from Harris School of Public Policy Studies, University of Chicago

Abstract: The "globalization debate" is often cast as a dispute between optimists who see global markets working to all societies’ long-term economic advantage and pessimists who fear that international integration will ultimately discourage long-term economic growth and development. As important as it is, however, the question of how globalization affects long-run economic performance is not the only relevant consideration: what about globalization’s impact on long-run political performance? This latter question has not received the attention it deserves. The purpose of this paper is to begin redressing that imbalance. Its main argument is that redistribution levels, which tend to depress political volatility (and are an important dependent variable in their own right), are a function – in the long run – of inequality. It is not aggregate or society-wide inequality that matters, however, so much as spatial inequality: the geographic segregation of differently endowed societal actors. After laying out this argument, the paper assesses globalization’s long-term demographic effects. Its tentative conclusion – that globalization encourages economic segregation, which in turn encourages (at least potentially) welfare-state retrenchment – is bolstered by a brief survey of recent trends in a number of countries around the world. The paper closes by considering a possible objection to its emphasis on spatial segregation: by reducing economic barriers to secession, globalization might be thought to mitigate, rather than sharpen, geographic tensions. This line of analysis is, the paper suggests, politically naive; for all the talk about globalization’s "disintegrationist" tendencies, the barriers to secession – even for regionally concentrated subnational groups – are likely to remain extremely high.

Keywords: globalization; redistribution; economic growth; political performance (search for similar items in EconPapers)
Date: 2005-08
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